Neymar was instrumental for the Ligue 1 side as they dominated Liverpool at the Parc des Princes.
Six Liverpool players were booked compared to just two from PSG.
After the match, Liverpool boss Jurgen Klopp said his players were made to look like ‘butchers’ by referee, Szymon Marciniak.
Neymar’s antics have come under scrutiny after numerous fouls were made on him.
But Carragher believes the Brazilian’s behaviour was ‘embarrassing’ and felt it leaves a sour taste following their win.
“It was very frustrating,” Carragher told Norwegian TV.
“Neymar is one of the best players in the world, but watching him was embarrassing.
“If he continues that through his whole career he will be remembered for that rather than the great player that he is.
“It leaves a sour taste in the mouth and I have no sympathy for the PSG players if Klopp is frustrated them, that’s understandable.
“Even Thiago Silva, the captain, was rolling around in the corner holding his face.
“PSG are a great team with great players. They don’t need to resort to these tactics.
“They should let the football do the talking.
“They should be embarrassed. I don’t understand how they can go back and speak to their family.
“The only time you see that is children in kindergarten.”
Liverpool defender Andy Robertson was similarly unimpressed but admitted Liverpool failed to deal with PSG’s tactics.
“I suppose they were in the lead and they were looking to waste time. You can use gamesmanship, play-acting, you can use it all really,” Robertson told Sky Sports News.
“I would like to know how much time they wasted tonight. It’s frustrating when [Neymar] is falling like he is.
“It’s all part and parcel of his game and we needed to deal with that. We didn’t quite control our aggression.
“Of course it was frustrating. But when you play against PSG you know it is something you are going to come up against especially with him. It wasn’t something we quite dealt with tonight.”